In what is perhaps Yoox Net-a-Porter Group's biggest expansion move since the two luxury e-commerce platforms merged last fall, the company announced Tuesday that it has sold a 4 percent stake to Middle Eastern retail giant Alabbar Enterprises in exchange for €100 million (about $113 million) in capital.
And when we say retail giant, we mean it: Mohamed Alabbar owns a number of malls and retail businesses in Dubai, including The Dubai Mall — the world's biggest and most-visited mall, which alone accounts for 50 percent of all of Dubai's luxury goods spend. Clearly, Yoox Net-a-Porter's decision to partner with Alabbar was strategic: In addition to funds, he provides expertise in the Middle Eastern market, an important one for luxury businesses despite the fact that growth of the market there has recently begun to slow. In a release, Yoox Net-a-Porter describes this market as "promising yet complex." It also notes that e-commerce activity is growing in the region, and that Net-a-Porter, The Outnet and Mr Porter have all experienced "remarkable growth" there — even though not one of them offers a version of its site that specifically caters to Arabic-speaking customers.
"I sincerely admire Mr. Alabbar for his forward-thinking and relentless drive to innovate, a vision that has led to the creation of the world's biggest mall," said Yoox Net-a-Porter CEO Frederico Marchetti in a statement. "His track record in delivering exclusive luxury and retail experiences across the Middle East will provide us with invaluable insights in the fast-growing regional luxury fashion market."
Investors seem pleased with the news: shares were up 5.63 percent as of 9 a.m. Tuesday.